Consider yourself lucky if you only sell your products or services in your own province or territory. If you’re selling to other provinces or territories, you have to understand the different requirements of those jurisdictions and, in some cases, file the appropriate returns with those jurisdictions.
There are three categories of sales tax structures in Canada:
- Jurisdictions that collect GST only: Alberta, Nunavit, Northwest Territories, and Yukon. You are required to collect GST and include those amounts in your GST/HST return.
- Jurisdictions that collect HST (combined GST + PST): Prince Edward Island, New Brunswick, Newfoundland and Labrador, Nova Scotia, and Ontario. You are required to collect GST/HST and include those amounts in your GST/HST return.
- Jurisdictions that collect GST plus PST: British Columbia, Saskatchewan, Manitoba, and Quebec. You are required to collect GST/HST and include those amounts in your GST/HST return. You are also required to register with these provinces, collect the appropriate amount of PST and file PST returns with these provinces.
Two exceptions are Saskatchewan and Quebec. In Saskatchewan, registering and collecting is optional. If you choose not to, the onus is on your customers to pay the PST. In Quebec, you are generally only required to collect PST if you are a non-resident and have no physical presence or employees in Quebec.
GST, HST, & PST Rates
|
GST % |
PST % |
Total % |
|
|---|---|---|---|
| GST Only | |||
| Alberta, Nunavit, Northwest Territories, Yukon | 5 | 0 | 5 |
| GST + HST | |||
| Prince Edward Island | 5 | 10 | 15 |
| New Brunswick | 5 | 10 | 15 |
| Newfoundland and Labrador | 5 | 10 | 15 |
| Nova Scotia | 5 | 10 | 15 |
| Ontario | 5 | 8 | 13 |
| GST + PST | |||
| British Columbia | 5 | 7 | 12 |
| Saskatchewan | 5 | 6 | 11 |
| Manitoba | 5 | 8 | 13 |
| Quebec | 5 | 9.975 | 14.975 |
Zero-Rated and Exempt Goods and Services
Although most goods and services are subject to GST/HST, there are some exceptions:
- Zero-rated goods and services: e.g. groceries, prescription drugs, and most livestock, agricultural, and fishery products. Although the GST rate for these items is 0%, the sellers can claim input tax credits for related costs.
- Exempt goods and services: e.g. most medical and dental services, daycare services, residential rentals, music lessons, and education services.
Input Tax Credits
While you are required to collect and remit GST, you can offset the amount you owe with all of the GST you have paid on your supplies. These are called Input Tax Credits (ITCs).
GST Registration, Filing, & Remittances
You must register for GST/HST once your business revenues reach $30,000 in any rolling four quarters. However, you can register and collect GST/HST earlier to take advantage of input tax credits.
Your filing frequency can be monthly, quarterly, or annually depending on the amount of your revenues, although you can opt to file more frequently if it makes it easier to manage your cash flow.
|
Annual taxable sales threshold amounts |
Required reporting period |
Optional reporting periods |
|---|---|---|
|
$1,500,000 or less |
Annual |
Monthly, Quarterly |
|
More than $1,500,000 up to $6,000,000 |
Quarterly |
Monthly |
|
More than $6,000,000 |
Monthly |
Nil |
Find It All Confusing?
It is, but luckily you can relax when you sign up for our services. We’ll not only advise you on all your requirements and make sure you’re registered in the appropriate jurisdictions, we’ll also prepare and file all your returns and make your remittances. With the backend taken care of, you can focus on your business knowing that you’re always in compliance.
Contact us today.